In its most recent revenue estimates published in May, the Legislative Finance Committee (LFC) found that about half of General Fund revenue was tied to oil and gas, marking an increase from prior estimates that the industry accounted for about a third of the state’s budget.
Jim Winchester, president of fossil fuel trade group the Independent Petroleum Association of New Mexico (IPANM) said the recent reports of increased oil and gas revenue should send a message to lawmakers that the industry must be supported by state policy.
Winchester cited New Mexico as the second-highest oil producer in the U.S. and seventh-highest natural gas producer, arguing that 50 percent of oil growth in the U.S. came from the state.
“IPANM hopes the staggering $7 billion revenue number encourages government leaders, legislators, and communities to do everything possible to protect our safe and responsible oil & gas production,” Winchester said.
“While we agree state economic diversification is critical for stabilizing revenues, let’s acknowledge the enormous benefits that $7 billion dollars brings to the overall well-being of New Mexicans through funding of education, public safety, healthcare, and social programs.”
Carlbad Current Argus Article: About half of New Mexico’s budget is reliant on the oil and gas industry, report says
IPANM (June 1, 2023) – Economic prosperity for the State of New Mexico rides on the back of the Oil & Gas industry, as the Legislative Finance Committee’s 2023 Post-Session Fiscal Review articulates. The report, released Thursday, indicates more than 50% of New Mexico’s General Fund revenues will come from (an estimated $7 Billion for FY2024) will come from New Mexico’s Oil & Gas Industry.
“The LFC report reflects the estimated increased production gains we will continue to see for oil & gas in New Mexico in this next year,” said IPANM Executive Director Jim Winchester.
“IPANM hopes the staggering $7 Billion revenue number encourages government leaders, legislators, and communities to do everything possible to protect our safe and responsible oil & gas production.”
“With our status as the #2 producing oil state and the #7 natural gas producing state in the country, coupled with the recent federal findings that 50% of oil growth in the United States in 2022 came directly from New Mexico production, our state cannot afford to be pushed too quickly into the energy transition.”
“While we agree state economic diversification is critical for stabilizing revenues, let’s acknowledge the enormous benefits that $7 Billion dollars brings to the overall well-being of New Mexicans through funding of education, public safety, healthcare, and social programs.”
See the LFC chart below that is included in the LFC report. The oil & gas revenue coming into the state, including money to the state permanent fund (the blue line) shows more than 50% of New Mexico’s General Fund Revenues (nearly $7 Billion estimated for FY2024) coming from oil and gas. The windfall already allowed the New Mexico State Legislature to pass a record $9 Billion budget this past legislative session, which is now on a pathway to continue to increase.
The report summarizes the upward revenue trend. The report reads on Page 3, “The state’s oil production continues to reach new records, with associated gas production further propelling New Mexico’s energy bonanza. Recovery in the oil and gas industry accounted for over two-thirds of the increase in expected general fund revenues in the December 2022 consensus revenue update.”
The LFC report also indicates that next year the state could also see another multi-billion dollar budget surplus if oil & gas prices remain at current levels.
